This Metal Will Shift Your Profits into Higher Gear

The future is roaring straight toward us, and it’s shifting into higher gear.

I’m talking about electric vehicles (EVs). Now, if you think about electric vehicles, you probably think “Tesla.” But it’s time to expand your horizons AND your profits. Tesla (TSLA) is the EV maker of the past.

Yeah, yeah, Tesla’s Gigafactory 1 in Nevada is the bee’s knees. And founder Elon Musk plans to build another 10 to 20 plants where it can make batteries for its EVs.

But you know what? There are 17 other gigafactories already built, being built, or planned around the world.

Volkswagen is building its own mega-battery plant in Germany. And it has stated a goal to “more than triple the range” of VW’s current crop of electric vehicles.

Do you think Tesla can compete with Volkswagen?

Tesla produced 83,922 vehicles last year. And lost money on each one. Volkswagen produced 10.3 million cars last year. That means it equals Tesla’s entire annual production in just three days.

Sure, Tesla is going to crank up production. I guess now it will lose more money, faster.

And it’s not just Volkswagen (VLKAY). It’s Ford (F), General Motors (GM) and Toyota (TM). And, a bunch of Chinese carmakers you never heard of.

All the big carmakers are making detours off the internal-combustion engine (ICE) vehicle highway. And they’re ramping-up their electric-car production as rapidly as possible.

And what do all these cars have in common? Lithium-ion batteries.

Now, I can make a case for all the metals used in lithium-ion batteries. I often do. Subscribers to my Supercycle Investor publication will tell you I have lots to say on the subject.

But today, we’re going to talk about just one of those metals: Lithium.

Energy Storage Growth

In 2016, half of global lithium supplied went to energy storage. That includes batteries for EVs, electronics and grid storage. That’s up from about 30% in 2014.

That’s some growth!

Lithium demand for energy applications is projected to soar over the next five years.

Batteries account for 50% of the lithium market. But this trend is just starting.

The fact is: Lithium-ion batteries are superior to regular rechargeable batteries. That’s because they can be recharged … over and over and over again.

That’s why everyone wants lithium. And why, as an investor, you should, too.

History is on Our Side

Shortly after the turn of the last century, we saw the world shift from horses to internal-combustion engine vehicles. Now, a similar shift is going on, this time to EVs.

Still, electric cars represented only 1.1% of total auto sales in 2016.

According to a report by Reuters, Consultants CRU Group said that electric cars and plug-in hybrid vehicle sales could hit 4.4 million in 2021. That is a heck of a jump from last year.

The long-term outlook is good, too! Morgan Stanley forecasts that the production and use of electric cars will rise to 9.4% of the 102 million anticipated new vehicles in 2025. Then keep rising.

It should hit 81% of 132 million new auto sales by 2050, from just 1.1% of 86.5 million new autos this year.

And that is sending lithium’s price higher … and HIGHER!

Consultants at Roskill estimate we will need 785,000 metric tons per year of lithium-carbonate equivalent by 2025.

That works out to a 26,000-metric-ton shortfall from the anticipated supply. Compare that to 217,000 tons of demand vs. 227,000 tons of supply this year. And other analysts expect an even larger deficit.

Do you have a spare 10,000 tons of lithium hanging around?

Don’t feel bad. No one else does, either!

The Race Is On!

Hence, the race for new lithium supplies is on. And lithium prices are shifting into high gear.

Do you want your profits to shift into high gear? Then you better get busy buying the best lithium miners. This EV megatrend and lithium supercycle aren’t going away.

My Supercycle Investor subscribers already own the best lithium stocks. We’ll buy more. Do your own due diligence if you go that route.

But here’s the good news: You can ride this lithium road to riches with an ETF. I’m talking the Global X Lithium & Battery Tech ETF (NYSE: LIT). Take a look at this weekly chart.

Nice trend, eh? It’s very liquid. More so all the time, as the lithium revolution steps on the gas.

LIT owns a basket of lithium miners and battery-makers. It’s plugged into the next big names in the industry. And it will help you rev your profit engine.

If you’re more conservative, wait for LIT to pull back to its 10-period moving average on its weekly chart. That’s the 50-day moving average. It does that regularly.

If you’re more speculative, well … what are you waiting for?

To get my timely signals and specific stocks to buy and when, go here

Full disclosure: I trade in and out of lithium stocks in my personal account. And I may buy (and sell) LIT in the future.

All the best,
Sean Brodrick

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Comments 22

  1. Helen August 30, 2017

    How does Orroplata Lithium stand in this market?

    Reply

    • Sean Brodrick August 30, 2017

      We can’t give individual portfolio recommendations. That said, it’s a 10-cent stocks that delayed its last 10-Q filing deadline. That’s not a company killer. Just know the kind of risk you’re looking at here (higher than average).

      Reply

  2. Chris J August 30, 2017

    Lithium has long been in demand for laptops, then phones and now cars. I struggle to understand why the 3 and 7 year charts do not support the same trends. In fact the ETF is exactly priced where it was in 2010, so a long term investor would just now be breaking even.

    Reply

  3. Bob August 31, 2017

    Sean:
    For the most part you are correct………However;
    Isn’t it Lithium batteries that start on FIRE?? Cell phones, hover boards, Tesla cars. Has anyone fixed that??
    There is much more Cobalt than Lithium in those batteries….means more demand for Cobalt.
    A battery has NEVER been made that will recharge to 100%. So every recharge means 2% less battery power.
    Tesla cars go 200 miles on a charge and it takes hours to recharge. (battery replacement is $50,000.)
    Frisker cars go 400 miles and take only 15 minutes to recharge, anyone know why?? I do, different metal.
    Bob

    Reply

    • Andrew Whitehead September 2, 2017

      Are you sure of that!!!

      Reply

  4. Will August 31, 2017

    Lithium is used in the anode for the battery, there is more metal used in the cathode – usually cobalt, nickel, manganese or a combination of these. Of these cobalt provides the longest recharge, and the supply conditions for cobalt has far greater issues than there are for lithium. Lithium can be found in numerous stand alone locations, whereas cobalt is primarily a by product in mining for other minerals. This is one of several reasons why the increase in the price of cobalt has substantially outstripped that of lithium. Why even look at the anode, when the composition of the cathode determines the life of charge and is the biggest cost of the materials used?

    Reply

    • Sean Brodrick September 6, 2017

      I also recommend cobalt stocks, and stocks of companies focused on other “energy metals.” Supercycle Investor subscribers know what I’m talking about. Best wishes, Sean.

      Reply

  5. mkj90620 August 31, 2017

    Battery technology keeps changing.Watch out if lithium gets too expensive and substitutes are found.I’ve read that zinc contained batteries are the future.Remember when platinum was the only metal used in catalytic converters and then palladium was found to work well for much less.

    Reply

  6. Robert Schubring September 1, 2017

    Unfortunately for the rose-colored glasses set, the world’s known reserves of lithium are so huge, that if we destroyed every cellphone in existence and recycled the lithium in it’s batteries, mixed that with the known reserves of lithium in brine lakes and rocks, and made electric cars with it, the entire city of Phoenix, Arizona, could have one electric car to replace each of it’s current gasoline-fired models.

    That’s the alarming news from California battery expert William Todorof.

    Bill Todorof invented a lithium-free car battery and is working to commercialize it.

    And he knows what he’s talking about. A previous invention of his, a lithium-aluminum-silicon alloy, is now used in the majority of solar panels now in production. The key trick to making a solar panel work, is something called a P-N Junction, which exists at the place where two dissimilar solids, touch each other. To get sunlight turned into electricity, it isn’t enough for the sunlight to touch the top surface of the solar panel. It has to penetrate deep inside the solar panel, to reach the P-N Junction between the upper layer of silicon alloy and the lower layer of silicon alloy, because it’s at the joint between the two layers that the electricity is made.

    Bill figured out that 1960’s solar panels were hopelessly inefficient because the top layer of material was far too thick to allow significant amounts of light energy to reach inside to the P-N Junction.

    In fact, Raytheon proposed a scheme in the early 1960’s, to launch solar panels into Earth orbit, wire them to microwave transmitters, and send energy to ground stations with them. They even demonstrated the electric-power-by-microwaves concept, by flying a toy helicopter above a suburban Boston office building for 6 months, using electricity sent by a microwave transmitter on the building’s roof, to a receiver in the toy helicopter. The purpose of putting the solar panels in orbit, was to take advantage of brighter sunlight and more-intense UV-A radiation, both of which helped to get some of the light to penetrate deep into the solar panel to reach the P-N Junction.

    Bill Todorof figured there had to be a better way to make a solar panel, and the trick was to make one of the layers thinner.

    Since silicon is rather brittle, he looked for a way to alloy the silicon and get it less brittle and more ductile. If he got it about as ductile as ordinary steel, he reasoned, it would be possible to roll it out into flat sheets, just as the sheet metal in car bodies is made.

    Bill experimented with different alloys, and found that by melting lithium aluminum hydride and aluminum fluoride with silicon, he could get a softer alloy that could be roll-formed 20x thinner than it was possible to make silicon by cutting and grinding.

    Since the purity of Bill’s upper layer didn’t need to be extremely high, a second advantage of the method, was that silicon scraps generated when microchips are manufactured, could be melted into his alloy, lowering the cost to make it.

    What’s alarming about Bill’s alloy technology, is that it wasn’t used by anybody, until 17 years had elapsed and his patents on it had expired. Then it became the standard means of making solar cells.

    Since information flow is so tightly-controlled by the industries that make these lithium products, their predictions need to be taken with a grain of salt.

    Auto makers in Detroit and Dusseldorf and Toyota City, share a common problem. The automatic transmission that joins the internal-combustion engine to the wheels, is a tremendously-complicated, expensive, and weighty object. Scrapping it could save thousands of dollars in manufacturing costs, per car, but would require laying off tens of thousands of workers and repurposing billions of dollars worth of precision-machining tools, or else scrapping them.

    Nobody puts a transmission on a railroad locomotive.

    Diesel-electric locomotives pushed out steam power in the 1950’s, because mounting an electiric motor on each axle gave better control of traction and reduced wear on the railway track itself, than did 2 giant steam pistons on steam locomotives.

    A mechanical transmission that tied the Diesel engine to a drive axle, would not have had the same advantages, so neither GM Electro-Motive nor General Electric considered the concept, for trains.

    Hybrid autos are really autos with an electronically-controlled, electric-powered transmission, that take advantage of a battery for short-term energy storage (during braking) and release (during acceleration).

    Once the industry finally gets serious about them, it will be discovered that major energy savings can be achieved, by designing car engines to be more like the engines of piston-engine light airplanes. That is, the engine designer will use a high-compression engine to pack many horsepower into a lightweight, tiny package, and will require antiknock fuels to make the engine work properly.

    Consider: Typical car gasoline today is 87 octane. But typical aviation gasoline is 100 octane. E85 ethanol fuel is 106 octane.

    Car gasoline is low-octane because we design the engines to be under-utilized. They only reach full power during acceleration.

    Redesigning hybrid cars to take full advantage of the capabilites of electric traction, demands that we run the engine at full power, most of the time, and use the batteries for acceleration.

    When we do that, 106-octane E85 makes a lot more sense, than it does in any vehicle currently on the market.

    So what’s in Bill Todorof’s new battery, if it isn’t lithium?

    We both use the same patent attorney, and he’ll let us know when the patent application is published.

    What’s Bill’s prediction about lithium?

    After experiencing how pump-and-dump games worked against his solar technology, his guess is that as soon as enough brine-based lithium capacity is installed and running, to cover the needs of the solar industry, there will be an abrupt shutoff of investment capital away from Tesla and companies like it.

    The present pumping-up of lithium markets, and the push for spodumene-derived lithium, seeks to get debt-riddled Argentina to bury itself deeper in debt, developing brine-based lithium. Once the debt is placed, dumping support for all-electric vehicles running entirely on lithium batteries, will guarantee a continued supply of cheap lithium for solar-panel manufacture.

    Spodumene is useful as an additive for Portland cement.

    Chemically dissolving the lithium out of it, is too costly a proposition to be practical, except for the political purpose of keeping Argentina hopelessly buried in debt. It’s the high cost of making lithium from spodumene, combined with the false premise that the lithium will be needed in the automotive market, that’s persuading Argentina to use it’s brine reserves as the basis for repaying not only loans used to develop the lithium, but also, accumulated bad debts that Argentina has piled up since the days of Evita Peron. The Argentine government has visions of overcharging for brine-based lithium and applying the profits to debt service, relying on the belief that costlier spodumene-based lithium will be in the market and pushing lithium prices upward.

    We saw the same storyline play out in 1981-83. Argentina fought the South Atlantic War, seeking to seize from Britain the Falkland and South Georgia Islands and the offshore oil reserves nearby, with which to pay down mountains of bad debt. When the price of oil collapsed, debt-ridden Argentina had no means of keeping current on it’s debt payments (and would have had this problem even had It won the war and taken the offshore oil deposits.). And, history is rhyming.

    Reply

    • Sean Brodrick September 6, 2017

      Bob, I have to disagree. We’ve been hearing this doom and gloom about lithium for quite some time, and they can’t mine enough of it. And sure, it’s a very common element. But finding it in deposits rich enough to be worth mining is the trick. Finally, if I had a dollar for every new, non-lithium battery technology someone has pushed as being “right around the corner,” I’d be sitting on a mountain of money. I’m not saying lithium will go up forever. But it is going up now. If you were an Supercycles Investor subscriber, you’d know how that is affecting lithium stocks. Sincerely, Sean

      Reply

  7. Harold Hansen September 2, 2017

    Mike Burnick, you may remember me , knowing Larry and living in Thailand.
    Can you tell me what he died of? I’m going to miss him. What about emails? Is there going to be iPhones and computers that work?
    What won’t? I’ve never seen these before, and I
    Don’t really want to see it. Anything you can help
    With. Info on Put options would be great! Thanks!

    Reply

  8. Wayne E Denney September 2, 2017

    I have owned to some time

    Reply

  9. Barbara Dowdy September 4, 2017

    Please let me know when to buy LIT, Global X Lithium ETF. Or let me know which battery company to buy. Thanks, Barbara

    Reply

  10. Philip Parker September 4, 2017

    Loved Larry Edelson’s market wave predictions. He said right before he died that he anticipated that the markets were going to spike up to possible 30,000 (i.e., the DOW). I suspect that he may very well be right with Trump in office. BTW, now that Larry is dead, ya think that you might rename your market service????

    Reply

  11. James September 12, 2017

    The key is to get into leveraged etfs, unleveraged etfs, mining stock, futures, and options. Whether that be call options or put options. The precious metals market is where the next boom is gonna be. It won’t be in real estate investment trusts or investors pools. Its gonna be a big boom the next boom maybe not as big as the last boom. That was probably one of the sweetest booms that human beings could ever live through. Its anyone’s guess where we are on this current, boom, recession, depression, recovery and growth cycle that we are on. Booms arnt meant to last forever, recessions are not meant to last forever either. Nice to see Larry’s legacy living on. He always said there would be another boom.

    Reply

  12. Ruth Rootenberg September 20, 2017

    The SuperCycle notes are not clear about which or if we can buy the mentioned stocks NOW or wait …..please clarify!

    Thanks.

    Member..

    Reply

  13. Victor anderson September 20, 2017

    Please send information on investing in Liteaum, and the Penney stock u mentioned.

    Thank you.

    Victor Anderson

    Reply

  14. Joe Tatman September 22, 2017

    I’M AN AMATEUR WHEN IT COMES TO THE “SUPER BATTERIES” BEING DEVELOPED FOR THE ELECTRIC AUTOS. I’M READING WHERE LITHIUM IS BEING COMBINED WITH VARIOUS OTHER MATERIALS, EX: COBALT, NICKEL OR MANGANESE GIVE THE BATTERIES LONGER LIFE AND BE MORE EFFICIENT. HOWEVER, THERE IS ANOTHER PRODUCT THAT IS A GREAT CONDUCTOR, NEARLY INDESTRUCTABLE AND IN A PRODUCT OF GRAPHITE, CALLED “GRAPHENE”! (I THINK THAT IS HOW IT IS SPELLED). IS IT POSSIBLE TO “MIX” GRAPHENE WITH LITHIUM AND/OR COBALT TO PRODUCE A SUPERIOR PRODUCT? FOR THOSE WHO AREN’T FAMILIAR WITH GRAPHENE, DO YOUR HOMEWORK AND CHECK IT OUT. IT’S WORTH A TRY……JOE TATMAN, AMATEUR THINKER.

    Reply

  15. The Best-performing Metal You’ve Never Heard Of – HoweStreet September 27, 2017

    […] I previously wrote about another energy metal, lithium, at the end of August. In it I recommended the Global X Lithium ETF (NYSE: LIT). If you followed my recommendation and bought LIT, you would have gained 16.6% through Monday. Wow! […]

    Reply

  16. Mukundam Veerabathini January 6, 2018

    I am subscribing for several years (year 2000 ).you said gold will go down to $ 260 per ounce .This happened. You said Banks will collapse and housing burst. This really happened.Since that time , your negative expectation is correct.But you did not come forward and informed client that bond purchasing by fed will be positive for investors and market will improve.Warrent buffet said few times that we do not get these dirt cheap stocks in life. We know fed printing and bond purchase will not good.on every American per capita loan will incease.But as an investor every body portfolio increased. Jobs increased.We investor look for personal profits only.Finally I am expecting that you recommend stocks from which we make money. Thank you.

    Reply